Australia’s major banks have reported stable results in the first half of the financial year.

KPMG’s Australian Major Banks Half Year 2024 Results Analysis finds that the Majors reported a combined profit after tax of $15.0 billion, down 10.5% compared to the first half of 2023, and an average of 0.3% from $15.1 billion for the second half of 2023. Income is broadly flat, the pace of margin erosion has slowed and operating expenses have reduced modestly compared to second half of 2023.

  • Interactive banking results dashboard

    Compare and analyse the results of the four major banks across 10 years of historical data including income, costs, liquidity, asset quality and returns. Also select to view half year or full year reporting metrics.

Growth is subdued but there are green shoots

Total revenue growth was subdued in the half with the Majors reflecting a modest 0.5% increase in total operating income compared with the second half of 2023. This was driven by average growth in total assets of 1.7% and 3.0% over the last 6 and 12 months respectively, with net interest income now comprising 85% of the Majors’ total revenue.   

Retail lending has continued to demonstrate margin compression due to competition and the deposit mix, with the Majors losing nearly 5% of market share since 2019. There has been a slowing in back book pricing decline which may indicate a level of margin stabilisation.

The Majors are looking for new growth and higher return opportunities, with business lending a common focus area. In 1H24 growth rates for both business and household lending were almost identical.

The Major Australian Banks have focused on balancing volume, margin and return with portfolio growth softening the impact of competition.

Maria Trinci
Partner, Banking Audit & Assurance
KPMG Australia

Interest margins under pressure but stabilising

While the Majors saw a positive spike in their interest margins in 1H23 as a result of rate rises, NIMs over the past 12 months have declined, consistent with the trend of the last 10 years. This decline has been driven largely by competition for home lending volumes and rising deposit and wholesale funding costs.

Positively, in 1H24 we are seeing a slowdown in the rate of margin compression as the Majors pull back from heavy competition, and deposit and wholesale funding pricing begins to stabilise in line with interest rates. This is evidenced by a relatively small decline in the average consumer NIM for the first half of FY24 as compared to during the second half of FY23.

Despite continued strong competition in the mortgage market and high funding costs, the compression of net interest margins for the Major Australian Banks has moderated in the first half of the financial year.

Kim Lawry
Partner, Banking Audit & Assurance
KPMG Australia

Ongoing cost reduction with significant emphasis on AI and automation

Banks continue to make positive progress on reducing CTI – driven by ongoing simplification of their businesses, the beneficial impact to income from the rising interest rate environment, and through the realisation of benefits from ongoing digital transformation. Despite this strong progress, global and local banking executives continue to highlight the importance of ongoing cost reduction, with many targeting 10% or more over the next 12 months.^ Over a quarter say they anticipate radical operating model changes to achieve this ambition, and more than 85% believe that AI and automation will be the most important strategic cost reduction lever in the future – a significant shift over the last three years.

^ Source: Beyond Savings: Cost optimization for the modern bank - KPMG Global

Providing transparency of cost benefits across the value chain between the suppliers and consumers of costs in the bank instead of functional silos, allows better outcome management aligned to the bank’s strategy, and decisions to be made on cross-functional optimisation.

Ben Kilpatrick
Partner, Financial Services Consulting
KPMG Australia

Credit portfolios remain resilient but there are clear signs of emerging stress

Business insolvencies are at their highest levels in over a decade based on challenging economic conditions and elevated interest rates. The credit concerns evident in business portfolios have had a limited but growing impact on retail portfolios to date. Consumer credit quality continues to benefit from low unemployment, robust house prices and remaining savings buffers.

This is likely to change over the remainder of 2024 with an expected increase in consumer arrears flowing from business challenges.

Banks that have adopted AI approaches and sophisticated credit models to identify early warning signals will be better placed to proactively manage customers and reduce the impact on credit quality.

Banks’ credit management capabilities will be tested as portfolio quality deteriorates in line with ongoing economic challenges and cost of living pressures, but recent evidence suggests that banks are well placed to manage the impact.

Paul Lichtenstein
Partner, Financial Risk Management
KPMG Australia


Average net interest margin for the Major Banks was 179 basis points for 1H24, a decrease of 11 basis points from 1H23, and 5 basis points from 2H23. This was driven by continued strong competition within the mortgage market and increased costs of deposit funding.

Average interest earning assets increased by 3.3% from 1H23 and 1.9% from 2H23 with all four banks reporting increases. Despite this, net interest income has decreased by 2.4% on average compared to 1H23, and 0.5% from 2H23.

Fees and commission income, which makes up 9.9% of the Majors’ total income, increased by 4.0% from 1H23 and 3.1% from 2H23, primarily driven by growth in lending fees due to higher volumes.

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The average cost to income ratio in 1H24 of 48.7% increased by 348 basis points from 1H23, however improved by 43 basis points from 2H23. These movements are consistent with the respective changes in total operating expenses over the same periods.

Over the past 12 months, the Majors reduced total headcount by approximately 0.5% and, although personnel expenses increased compared with 1H23, there was a decrease of 0.3% compared with 2H23.

Investment in Compliance and Risk has continued to decrease, which is consistent with an overall decrease in investment spend over the last 18 months.

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Capital and liquidity ratios remain well above regulatory minimums, demonstrating balance sheet and liquidity strength. The average Liquidity Coverage Ratio (LCR) increased to 135.3%, up 100 basis points from 2H23 and the average Common Equity Tier 1 (CET1) is 12.6%, an increase of 10 basis points compared with 2H23.

While the average leverage ratio decreased by 6 basis points from 2H23 to 5.3%, it is still well above the 3.5% APRA minimum requirement across the Majors.

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Liquidity coverage ratio

Asset quality

The Majors booked $1.21 billion in impairment charges in 1H24, which is approximately 13% lower than over the past 12 months. Over the first half, the average expected credit losses (ECL) as a percentage of gross loans and advances remained steady at 0.68% which is indicative of the continued strength of the Majors’ portfolio credit quality.

Total impaired loans have increased by 2.2% across the Majors in the last 12 months, although this is in the context of overall portfolio growth. The average percentage of total ECL associated with distressed loans (Stage 2 and Stage 3) decreased marginally by 6 basis points to 74.3% in the last 6 months.

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ECL as a percentage of Gross Loans and Advances (GLA)

Shareholder returns

Return on Average Equity decreased in the first half of FY24 compared with both 1H23 and 2H23 by 145 and 12 basis points respectively, to an average of 10.9%.

The Majors declared higher interim dividends with an increase in the average dividend per share of 2.9% compared to the first half of 2023. The Majors carried out $2.0 billion in share buybacks in 1H24, which in total is higher than both 1H23 and 2H23 respectively.

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Return on equity

Interactive banking results dashboard

Compare and analyse the results of the four major banks across 10 years of data including income, costs, liquidity, asset quality and returns. Also select to view half year or full year reporting metrics.

This historical data is drawn from major bank financial statements and disclosures, augmented with APRA financial statistics.

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Who are the four major banks in Australia?

Australia’s biggest banks (known as the top 4 banks) are: National Australia Bank (NAB), Commonwealth Bank of Australia (CBA), Australia and New Zealand Banking Group (ANZ) and Westpac (WBC).

Where does the data for the major Australian banks 2024 results come from?

The data is drawn from the big four Australian banks' financial statements and disclosures, augmented with financial statistics from The Australian Prudential Regulation Authority (APRA).

What can expect to see in the KPMG banking dashboard?

You can compare and analyse the results of the four major banks across 10 years of historical data including income, cost, liquidity, asset quality and results. The dashboard will also soon feature half year historical data.